trading limit

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Trading limit

The exchange-imposed maximum daliy price change that a futures contract or futures option contract can undergo.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Daily Trading Limit

The maximum amount of gain or loss that can occur on a particular security or, more commonly, derivative on a trading day. Derivatives, currencies, and commodities can be extremely volatile investments. In order to prevent this volatility from spiraling out of control, options and futures exchanges enact daily trading limits stating that a security cannot rise or fall more than a certain percent in a given trading day. If a security reaches the daily trading limit, trading on that security is suspended for the remainder of the day. This is called a locked market. See also: Limit up, Limit down.


1. The maximum amount of price change a futures contract is allowed to undergo on a given trading day. Limits are mandated by the exchanges on which futures contracts trade, and exist in order to reduce volatility in the market. It is also called a trading limit.

2. The maximum number of transactions in commodities that an individual may make on an exchange on a given trading day. Limits are mandated either by the Commodity Futures Trading Commission or by the exchanges on which commodity contracts trade. It is also called a trading limit.

3. See: Limit order.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

trading limit

The number of commodity contracts that a person may trade during a single day. The limit is established by the Commodity Futures Trading Commission or by the exchange on which the particular contract is traded. Compare position limit.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
Citigate Commodities Trading Limited looks to increase and secure assets in West Africa's renowned diamond producing nations, Guinea, Liberia, and Sierra Leone.
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Highland will be owned by the Highland Consortium, which consists of Baugur Group (through its wholly-owned subsidiary BG Holding), FL Group, Don McCarthy, West Coast Capital (through its wholly-owned subsidiary TBH Trading Limited), Kevin Stanford, Bank of Scotland (through its wholly-owned subsidiary Uberior) and Stefan Cassar.
The acquisition of the stock of BEC Trading Limited by Tree of Life, Inc., a subsidiary of Tree of Life/Gourmet Award Foods Canada Inc., was completed March 21st.
The American company IBE Trans of New York has sold 71% of its stake in the Chimko chemicals plant in Bulgaria to the Cypriot operator AVST Trading Limited. The leading shareholder in AVST is the British consortium United Kingdom Gas and Energy Finance, according to a statement from IBE Trans, which acquired a 57% stake in the Chimko plant, producing fertilisers, in July 1999, in a deal worth a million Deutschemarks (Euro 511,000).
The market started off under some selling pressure due to news that some Singapore brokerages had imposed their own trading limits Tuesday in a nervous response to heavy trading volumes in Singapore in recent weeks.
and another 60,000 square feet to Bristar Trading Limited, Solar International Shipping Agency, and Legent Corporation.